Pro-Dex (PDEX) investor relations material

Executive summary

• Net sales for the quarter ended September 30, 2025, increased 24% year-over-year to $18.5 million, driven by strong growth in orthopedic device sales and the resumption of next-generation handpiece shipments to a major customer.

• Net income rose 90% year-over-year to $4.7 million ($1.43 basic, $1.40 diluted EPS), reflecting higher revenue and significant unrealized investment gains.

• CEO highlighted the successful resumption of key product shipments and a substantial cash infusion from an investment exit.

• Gross margin declined to 29% from 35% due to higher product costs, under-absorption of manufacturing costs, and increased inventory and warranty charges.

• Backlog at quarter-end was $46.8 million, with $43.6 million scheduled for delivery in the remainder of fiscal 2026.

Financial highlights

• Operating income increased to $3.1 million from $3.0 million year-over-year.

• Unrealized gains on marketable equity investments totaled $3.3 million, up from $433,000 a year ago.

• Cash and cash equivalents rose to $514,000, with total investments at $10.0 million as of September 30, 2025.

• Net cash provided by operating activities was $2.3 million, up from $1.9 million in the prior year.

• No shares were repurchased during the quarter; cumulative repurchases since 2013 total 1.51 million shares.

Outlook and guidance

• Management expects continued revenue growth, supported by strong customer relationships, recurring shipment levels of the next-generation handpiece, and new product launches, though growth may be incremental.

• The company is negotiating to extend its largest customer contract through 2028 and is considering acquiring a supplier to meet anticipated demand.

• The Helios driver for CMF applications is expected to be released in the second quarter of fiscal 2026.

• The company is evaluating strategic uses for the recent cash proceeds from the Monogram investment exit.